How Compensation Affects More Than Just the Employee Private SectorPrivate Industry Cost DistributionState and Local Government Cost DistributionReasons Behind the Pay GapFederal Workers' Compensation and Its ProblemsCongressional Budget Office StatisticsBureau of Economic Analysis StatisticsPossible ReformsAlphabet: Pay and Facilities Without previousGoogle's accessible benefitsFighting poor healthSalaryHealthcareRetirementDeath benefitsPaid time offAim for excellent payCan't afford Google-sized benefits? No problemThe weight of value for health care, dental and visionHealth insurance is the most expensive cost for employersThe weight of other benefitsA more mobile workforceJob searchComparison of two companiesScale of personal importanceClosureStoryFrom large companies like Alphabet Inc. to small businesses, benefits are what attracts and retains the most admirable employees. Employees are becoming more and more diverse within the workforce. A diverse workforce means a diverse set of individual needs. The diversity of individuals' needs makes recruitment tasks for employers difficult. The inevitability of increasing diversity will force employers to start changing their old ways of paying to embrace a new, more customizable way of providing benefits. Diversity is not just about what people want, it also covers their capabilities. With new technologies and skilled users, the workforce will become increasingly mobile. Offering a more customizable benefits package will likely increase an employee's loyalty, productivity, and overall well-being. There is a constant struggle to find and retain the most talented employees, so employers who implement a better total compensation approach per employee will have an advantage. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get an Original EssayIn a survey conducted by MetLife (2016) on employers' recruiting challenges, more than half of employers in India, China , in Poland and worldwide The United Arab Emirates identified the recruitment process as difficult (MetLife, 2016) . Illustrate this as the global struggle that it is. In the United States, 91% of employers believe that benefits are important for attracting employees and 96% of employers believe that benefits are important for retaining employees (MetLife, 2016). Nearly a third of employees worldwide said a better benefits plan could convince them to stay with their current company (MetLife, 2016). There is clear consensus that employers understand the importance of benefits when it comes to attracting and retaining talented employees; while understanding that employees are weighing in on benefits far more than they ever have. The real challenge for employers is knowing exactly what to include in these packages. Among the difficulties of the recruitment process, other problems exist with overpayment in the public sector. The private sector has gotten rid of almost all defined benefit pension plans and has since replaced them withdefined contribution plans (Baker, 2018). Meanwhile, the public sector continues to rely on these defined benefit plans, contributing to a widening pay gap between the private and public sectors. According to a study by Joshua Rauh of Hoover Institutions (2017), almost every state or local government has an unbalanced budget due to uncontrollable pension fund costs. As the report claims, total unfunded pension liabilities are $3.85 trillion and state and local governments recognized only $1.38 trillion in 2017 (Rauh, 2017). As the percentage of assets states have available to fund future retirees continually declines, changes must be made. Benefits Basics There are benefits required by law and others that employers have the choice to include or not. It should be noted that each state has its own version of these required benefits. This is therefore a generic overview of the basic benefits covered by most employers. FICAA When it comes to required benefits, the first is the Federal Insurance Contributions Act (FICA). FICA requires employees and employers to contribute to a federal payroll tax used to fund Social Security and Medicare. The Social Security tax is 6.2% of gross pay, and an additional 1.45% of gross pay goes toward the Medicare tax. Employers pay the remaining 7.65%, for a total of 15.3% (Social Security Administration, 2017) . When hired, employees must complete certain tax forms that form the basis of the W-2 form that employers must file to report their wages. Social Security is a federal program that provides an individual with a sense of protection by paying monthly retirement benefits when you are eligible to retire. Medicare provides the same sense of financial security in retirement by paying benefits for certain health care costs. Workers’ compensation is another basic benefit. The Workers' Compensation Act requires employers to provide benefits to their employees if the loss that occurs is a work-related incident. This law makes the employer absolutely responsible. If an employer decides not to pay workers' compensation, it loses the right to rely on all three common law defenses. These three defenses include the doctrine of contributory negligence, the fellow servant doctrine, and the doctrine of assumption of risk (Beam and McFadden, 2012) . Essentially, these three doctrines made it nearly impossible to obtain compensation from an employer before the enactment of the Workers' Compensation Act. Because they exist, employees are more likely to win a workers' compensation case against their employer if the employer chooses not to provide workers' compensation. In most cases, the employer pays the entire cost of workers' compensation benefits. Workers' compensation laws include medical care, death benefits, disability benefits, and rehabilitation services. Workers' compensation medical care generally has no limit on its cost or the length of time a person can receive it if injured; there is also no waiting period for benefits to begin covering these medical costs (Beam & McFadden, 2012). Disability (worker's compensation) The four categories of disability fall undertotal or partial permanent and total or partial temporary categories. Typically, total disability benefits are 66% of an employee's average weekly wage and continue either for life or until the employee can work again (Beam and McFadden, 2012). Partial disabilities are paid as the difference between employees' wages before and after the accident. Depending on the classification of the injury, Medical Improvement Possible (MIP), Medical Improvement Expected (MIE), or Medical Improvement Not Expected (MINE), is what will distinguish how long a person can receive benefits ( Disability Benefits Help, 2018). . Workers' compensation death benefits cover funeral expenses, as well as cash payments to survivors representing a portion of an employee's average weekly wage. Workers who have made sufficient contributions to FICA are eligible for disability benefits. Unemployment Unemployment insurance requires all businesses to pay an unemployment tax for each employee. Unemployment insurance provides benefits to employees for a brief period if they are fired without good cause. There are eligibility requirements such as actively seeking employment, being able to work and completing a waiting period. The Social Security Act of 1935 required that a payroll tax be imposed on covered employers in order to fund unemployment insurance programs. These programs are funded by federal and state unemployment taxes. The federal tax is 6.2% of each worker's first $7,000 of gross earnings per year, but this percentage can be reduced by up to approximately 90% for taxes paid to the state (Department Of Labor, 2017 ). This does not mean that unemployment insurance solves all the problems of the unemployed. It aims to partially guarantee against massive income shortfalls after being released from employment. The Family Medical Leave Act The Family Medical Leave Act (FMLA) entitles employees to twelve weeks of unpaid but job-protected leave for qualifying medical and family reasons. The FMLA applies to employees of private companies with fifty or more employees (Investopedia, 2017). Businesses with fifty or more employees must also offer affordable health care coverage, under the Affordable Care Act. Sometimes employees face situations related to their home life, such as expecting a newborn, children getting into trouble or sustaining an injury, the death of loved ones, and even health issues. personal. These are issues that would pose a threat to an employee under FMLA in terms of job loss. FMLA helps employees balance their work duties and family needs. The fundamentals of starting a business and providing compensation require employers to provide time for employees to vote, serve in the military, and serve jury duty. Obey workers’ compensation laws. Withhold FICA taxes from employees' paychecks as well as their own contributions. Pay state and federal unemployment taxes. Contribute to disability programs in states where disability programs exist. And finally, follow the Family and Medical Leave Act. Cost Comparison Between Public and Private Sectors Employer Costs for Employee Compensation is a statistical survey and examination of what it costs employers to provide wages and benefits to their employees. The Bureau of LaborStatistics (BLS) conducts these surveys of the private sector, state and local governments, and civilian workers. For the September 2017 mandate, the BLS compiled statistics for nearly 30,000 employees across 6,700 private sector companies; and 8,100 employees from 1,400 different state and local government organizations (U.S. Department of Labor [DOL], 2018). Private Sector Cost Breakdown It costs private sector employers an average of $33.55 for each hour an employee works (DOL, 2018). 69.6% of the $33.55 ($23.3508) is paid as salary, and the remaining 30.4% ($10.1992) is paid as benefits (DOL, 2018). These benefits include: paid vacation ($2.32/hour), insurance ($2.68/hour), retirement ($1.39/hour), additional pay ($1.19/hour) and legally required benefits ($2.62/hour) (DOL, 2018). Cost Breakdown for Local GovernmentsWhen it comes to state and local governments, employers spent an average of $48.78 per employee labor hour (DOL, 2018). The breakdown between salary and benefits percentages of the $48.78 is 62.6% salary and 37.4% benefits (DOL, 2018). Once the $30.54 is paid in wages, the remaining $18.24 is paid in benefits (DOL, 2018). Retirement costs $5.56/hour, insurance costs $5.80/hour, paid time off costs $3.68/hour, and legally required benefits cost $2.71/hour (DOL, 2018). industry. Why then? Government defined benefit pension plans accounted for 10.6% of total compensation, compared to 1.9% for private sector defined benefit pension annuities (DOL, 2018). Government employees also receive higher percentages of paid leave and insurance benefits (DOL, 2018). Defined benefit pension plans are almost non-existent in the private sector, which widens the pay gap between the two employees. Working in the public sector provides employees with stability since the government never goes bankrupt; This is a hard-to-measure benefit that adds even more value to public sector compensation. A working paper by Glaeser and Ponzetto (2013) that demonstrates how public sector pay is influenced by politicians competing to win the public sector vote (Glaeser & Ponzetto, 2013). Public sector workers are better informed about their personal compensation plans; this gives them an informational advantage over other voters (Glaeser & Ponzetto, 2013). Public sector salaries are publicly available, but benefits are not easy to find and are much more difficult to interpret. This political system and process leads politicians to offer generous benefits to public sector workers, as opposed to salary increases (Glaeser and Ponzetto, 2013). If a politician decided to cut public sector benefits, he would lose votes from public sector voters and would not gain many votes from other non-public sector voters due to his information disadvantage (not not knowing that lower benefits mean less profits). taxes) (Glaeser & Ponzetto, 2013). Even if the politician tried to increase public sector wages to regain votes, he would lose more votes among the non-public sector population, because the non-public sector population is better informed about wages than about benefits. (Glaeser and Ponzetto, 2013). Generally speaking, it is essential to understand that politics has a major influence on the economy. The budgets ofStates are facing severe pressures from rising pensions and health benefits. If all voters were better informed about the policies behind public sector pay, it is likely that more people would push for logical change. paid 17% more than comparable employees in the private sector. The federal workforce consists of 2.1 million civilian workers and represents a $276 billion tax burden on U.S. taxpayers (Edwards, 2017) . In 2016, federal employees earned 80% more than private sector employees and 42% more than local government employees (Edwards, 2017). It's safe to say that federal employees have each other when it comes to securing a stable, well-paying job. In an effort to save money, federal wages were partially frozen between 2011 and 2013, saving billions. However, there is still a greater need for savings (Edwards, 2017). Our government needs to focus more on reducing excessive benefits (especially its defined benefit plans) for federal employees, as well as ending low-value programs. Bureau of Economic Analysis Statistics 2016 data from the Bureau of Economic Analysis (BEA) shows that federal civilian workers earned an average of $88,809 on wages alone, while private sector employees earned an average of $59,458. When you factor in benefits and health care, the gap widens. Average total compensation for federal workers increased to $127,259 and average total compensation for private sector workers increased only to $70,764 (Congressional Budget Office [CBO], 2017) . The mathematics speaks for itself. A significant gap of $38,450 in additional benefits for federal workers compared to the $11,306 in additional benefits for private sector workers. Compensation growth is driven by the movement of federal workers into higher pay brackets despite actual performance (CBO, 2017). Due to the operation of the General Schedule (GS) pay scale, federal employees receive some problematic pay increases (CBO, 2017). The first is the annual wage adjustment based on average wage growth, essentially a cost-of-living adjustment (CBO, 2017). The second pay increase is due to federal employees moving up the ten steps in their GS level based on seniority (CBO, 2017). Deserving longevity over performance is problematic in itself. Federal unions actively fight legislators who attempt to implement a reduction in worker wages (Edwards, 2017). Additionally, members of Congress who have a plethora of federal workers in their districts frequently oversee pay raise efforts (Edwards,2017). Federal employees receive health insurance, retirement health benefits, and pension plans with inflation protection, as well as a retirement savings plan that also benefits from a government match (Edwards, 2017). The most important advantage of all is their job security. They are supported by civil service protections and nearly a third of federal employees are represented by unions (Edwards, 2017). This means that federal employees are rarely laid off. It has been found that only 0.5% of federal workers are laid off each year for any reason (Edwards, 2017). Possible reformsFederal workers deserve to be paid appropriately, and the federal workforce needs talented employees. paid industries. Reducing federal wages would encourage layoffs of immobile employees, creating room for younger, more creative minds while reducing costs (Edwards, 2017). Removing overly generous employee benefits, such as defined benefit pension plans, would reduce costs. Privatization is considered a dirty word in local politics, but it can often be successful. Privatizing federal jobs is another possible way to reform federal wages. Additionally, to address budget shortfalls, policymakers should consider reforming federal compensation to narrow the gap between federal and private worker pay. Alphabet: Unprecedented Compensation and Facilities In 2015, Google became a technology conglomerate creating a parent company named Alphabet Inc. Fortune magazine has listed them eleven times on their annual list of the 100 Best Places to Work, and in 2017, they were number one (Fortune, 2017). Google offers the most competitive benefits packages, gives its employees plenty of opportunities for internal growth, and ultimately satisfies them by being part of something that will positively impact the world. Google's Accessible BenefitsGoogle offers an exhausting list of benefits that cost them next to nothing. Some of their on-site perks include oil changes, dry cleaning, massage chairs, nap pods, haircuts, bike repair, ATMs, organic grocery delivery and equality of social benefits; all of which represent negligible costs for Google (D'Onfro, 2015). The rewards offered by such perks are improved morale and efficiency. Their massages, free food, shuttle service, and subsidized childcare, however, affect the company's bottom line (D'Onfro, 2015). They have offices in North America, Latin America, Europe, Asia Pacific, Middle East and Africa. Google has a knack for expanding its offices, or “campuses,” as many of them are called. Campus is a more appropriate word for their offices located in New York, New York, and Mountain View, California. Their New York office takes up an entire city block, or 2.9 million square feet. It is therefore natural that they provide their employees with scooters to move around the huge building. The Mountain View campus they call “Googleplex” is 2 million square feet (Hartmans, 2017). Filled with colorful bicycles and electric cars that employees use to travel from building to building, a GARField (Google Athletic Recreational Field), and even organic gardens in which the produce is used by their bosses. In many of their other offices, they have putting greens, slides between floors, Lego rooms, fire poles, and bowling alleys. The sheer aesthetic appeal of working at Google is an incalculable benefit that adds value to their already enormous list of perks. Combating Poor HealthPoor health and obesity cost businesses $225 billion annually (Centers for Disease Control and Prevention [CDC], 2016). Google combats this problem by offering healthy meals all day long at no cost to its employees. An interview was conducted with Nate Keller, the former executive chef of Google before his departure in 2008. He stated that in 2008, with 19,000 employees, 675 kitchen staff and serving 40,000 meals perToday, Google spent nearly $80 million per year on food (Shontell, 2014). Google doesn't release this information publicly, so costs are likely higher today. To give some context, Alphabet Inc. had approximately $109 billion in revenue for fiscal year 2017 (ABC.XYZ, 2017). Spending even $100 million on food would only cost them 0.1% of their income. In return, this small investment helps keep Google employees healthy and productive. By offering free food, it helps reduce employee food costs by ten. Employees can also drink beer or wine in the office on Fridays, which is a real enticement.SalaryAs for salaries, they are not publicly available, but there are websites such as Glassdoor where salaries are listed. Employees have published their average salary while working at Google. . Glassdoor is a self-reported data collection website where people can post information about their employment. The information cannot be fully accredited, even though the majority of posts on Glassdoor were made by genuine Google representatives, it is still possible that the information is invalid. For the sake of research, this is the only source I was able to obtain for some aspects of Google's benefits. Glassdoor data compiled from 4,440 respondents indicates that the average salary for software engineers is $118,958, with a range of $78,000 to $215,000 (Glassdoor, 2018). According to the BLS, the average salary for workers in all occupations in the United States in 2016 was $49,630 (DOL, 2016). Being about $28,000 above the average salary is a good idea for Google. This is simply a comparison between an average American worker and a software engineer at Google. So, an extra $30,000 for a software engineer doesn't seem like the biggest pay raise. Keep in mind that this is just a salary. When you factor in Google employee benefits, that number will likely increase by another $30,000 or more. Healthcare Although Google offers seemingly endless built-in benefits, let's take a look at their employee benefits. social benefits. They offer on-site doctors, medical services, and offer excellent health care options. They provide employees with travel insurance for personal and business vacations, making employees feel safe on the road (Glassdoor, 2018). Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs) are options you can choose from for certain health coverages you may choose to enroll in. This applies to most employers offering any type of health plan. HMOs lock you into one primary care doctor and you can't change without a referral. PPOs offer flexibility in that you can see any primary care doctor you want. If you are in your network, the co-pay and out-of-pocket costs are consistent, but they will increase if you leave your network. RetirementFor retirement purposes, they offer a 50% match of $401,000 up to $8,250 with auto-enrollment (Glassdoor 2018). In other words, to get the full contribution, you'll need to contribute $16,500 to your 401,000. The 401k replaced the pension. Being able to contribute a portion of your salary tax-free (assuming it's traditional) to a range of stocks, bonds and money markets is aanchor point in itself. 401k retirement plans are a great alternative retirement account. Although vesting periods vary; This creates a sense of loyalty if your company has a large contribution plan. Death Benefits Google's death benefits are generous. Surviving spouses of deceased Google employees receive 50% of their salary for the next 10 years. The shares of a deceased employee also vest immediately; their children receive $1,000 per month until age 19, but if they study full-time, these payments continue until age 23 (Casserly, 2012). Unlike most benefits offered by Google, these more than generous death benefits are arguably costly for the company. Instead of these death benefits increasing the efficiency of the company, they establish the company's standard of care for each of its employees. When a company is this friendly, reasonable and understanding, it's hard not to appreciate their morals. Paid Leave New mothers receive 18 weeks of paid maternity leave and an additional four weeks if they experience complications during childbirth. Once again, another nice and reasonable plan. They even give fathers or any type of primary caregiver up to 12 weeks of paid leave. In addition to paid maternity leave, employees also receive an additional $500 to spend on the newborn (Adamczyk, 2015) . First-year engineers receive 15 days of paid leave, increasing to 20 days after 3 years and 25 days after 5 years. Employees can also take three months of unpaid leave (Adamczyk, 2015). These kinds of benefits definitely attract the attention of top engineers. Goal of Great Compensation Why do companies like Google spend so much money on their benefits? Any competitive business measures the cost of benefits against increased efficiency and productivity. The goal is to attract, place and retain the right people for the right job. Assuming that your satisfied employees lead to more satisfied customers, there will be an increase in profitability and market share within your industry sector. Google equates success with employee satisfaction (Google, 2018). Simple people management practices that they implement; for example, reduced status differences and first-order advantages lead to a surge in innovation and reduced costs. Can't afford Google-sized perks? No problemMassive holding companies like Alphabet Inc. offer unprecedented compensation packages, unless you work for a comparable company like Facebook or Adobe. As for your average company, you can't offer free food, billion-dollar offices, and generous 401k plans. To be competitive, you need to look at how much people actually value employee benefits. The weight of value for health care, dental care and vision. An increase in benefits over a salary increase is favored by 80% of workers who participated in the Glassdoor Employee Confidence Survey ( Glassdoor, 2015) . What options are available to companies that simply can't afford to offer such lavish benefits? A study conducted by Fractl (2016) highlights the fact that some of the most sought-after employee benefits are the least expensive. The principle of this study was to ask 2,000 people what advantages they would grant "a certainconsideration” or “a lot of attention” when they had to choose between a high-paying job with lower benefits or a low-paying job with higher benefits (Fractl, 2016). . Health, dental and vision insurance rank first among the most important benefits. 88% of participants said they would either consider having better health, dental and vision coverage, when choosing the lowest paying job (Fractl, 2016). Health insurance is the most expensive cost for employers. are able to provide health, dental and life insurance, with the understanding that health cover providers will charge small businesses more than large businesses. Quite simply because of the lack of purchasing power. According to the National Conference of State Legislatures (NCSL), small businesses pay on average 8 to 18 percent more for comparable coverages than large businesses (National Conference of State Legislatures [NCSL], 2017). Health insurance is the most expensive health insurance that employers offer their employees. According to the Kaiser Family Foundation (2016), this costs an employer $6,435 per individual coverage and $18,142 for family coverage (Kaiser Family Foundation, 2016) . Additionally, depending on the employer's prior health claims and the specific industry in which it operates, the premiums charged to employers will vary. Since better health, dental, and vision coverage is more attractive to employees, small businesses will need to spend additional money to attract and incentivize employees. The Weight of Other Benefits Small business employers will be jovial to know that flexible schedules, vacation time, mobile work options, and unlimited vacation time are the other most popular benefits among employees (Fractl, 2016). With constant advancements in the world of technology, “going to work” has a whole new dimension. meaning. The world of technology is full of communication devices that allow people to stay virtually connected. From FaceTime to Skype to screen sharing, employees can work from home more than ever (Collins, 2016) . Essentially, depending on your business, this could reduce overhead costs by up to 100%. Which would allow any employer to spend more money on popular health, dental and vision plans. A More Mobile Workforce The amount of money companies are throwing away due to the reluctance of people to take time off runs into the hundreds of billions (White , 2016) . It is estimated that businesses waste $272 billion because people refuse to take time off (White, 2016). An unlimited vacation policy would not only eliminate these unnecessary costs, but develop a more preferable company culture. Employees who are treated as trustworthy people will likely become more productive and loyal. Work-life balance is increasingly important to the workforce. Studies have shown that a majority of people would consider a lower-paying job with more flexibility, even without the “best” benefits package (Fractl, 2015). Ultimately, employers have strategies to be able to compete with larger companies that can afford to offer better benefits. Offering the right combination of low-cost and most desirable benefits can provide small businesses with the competitive edge they need to attract top talent.Job SearchSearching for a job comes with the.

Essay / How Compensation Affects More Than Just the Employee Private SectorPrivate Industry Cost DistributionState and Local Government Cost DistributionReasons Behind the Pay GapFederal Workers' Compensation and Its ProblemsCongressional Budget Office StatisticsBureau of Economic Analysis StatisticsPossible ReformsAlphabet: Pay and Facilities Without previousGoogle's accessible benefitsFighting poor healthSalaryHealthcareRetirementDeath benefitsPaid time offAim for excellent payCan't afford Google-sized benefits? No problemThe weight of value for health care, dental and visionHealth insurance is the most expensive cost for employersThe weight of other benefitsA more mobile workforceJob searchComparison of two companiesScale of personal importanceClosureStoryFrom large companies like Alphabet Inc. to small businesses, benefits are what attracts and retains the most admirable employees. Employees are becoming more and more diverse within the workforce. A diverse workforce means a diverse set of individual needs. The diversity of individuals' needs makes recruitment tasks for employers difficult. The inevitability of increasing diversity will force employers to start changing their old ways of paying to embrace a new, more customizable way of providing benefits. Diversity is not just about what people want, it also covers their capabilities. With new technologies and skilled users, the workforce will become increasingly mobile. Offering a more customizable benefits package will likely increase an employee's loyalty, productivity, and overall well-being. There is a constant struggle to find and retain the most talented employees, so employers who implement a better total compensation approach per employee will have an advantage. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get an Original EssayIn a survey conducted by MetLife (2016) on employers' recruiting challenges, more than half of employers in India, China , in Poland and worldwide The United Arab Emirates identified the recruitment process as difficult (MetLife, 2016) . Illustrate this as the global struggle that it is. In the United States, 91% of employers believe that benefits are important for attracting employees and 96% of employers believe that benefits are important for retaining employees (MetLife, 2016). Nearly a third of employees worldwide said a better benefits plan could convince them to stay with their current company (MetLife, 2016). There is clear consensus that employers understand the importance of benefits when it comes to attracting and retaining talented employees; while understanding that employees are weighing in on benefits far more than they ever have. The real challenge for employers is knowing exactly what to include in these packages. Among the difficulties of the recruitment process, other problems exist with overpayment in the public sector. The private sector has gotten rid of almost all defined benefit pension plans and has since replaced them withdefined contribution plans (Baker, 2018). Meanwhile, the public sector continues to rely on these defined benefit plans, contributing to a widening pay gap between the private and public sectors. According to a study by Joshua Rauh of Hoover Institutions (2017), almost every state or local government has an unbalanced budget due to uncontrollable pension fund costs. As the report claims, total unfunded pension liabilities are $3.85 trillion and state and local governments recognized only $1.38 trillion in 2017 (Rauh, 2017). As the percentage of assets states have available to fund future retirees continually declines, changes must be made. Benefits Basics There are benefits required by law and others that employers have the choice to include or not. It should be noted that each state has its own version of these required benefits. This is therefore a generic overview of the basic benefits covered by most employers. FICAA When it comes to required benefits, the first is the Federal Insurance Contributions Act (FICA). FICA requires employees and employers to contribute to a federal payroll tax used to fund Social Security and Medicare. The Social Security tax is 6.2% of gross pay, and an additional 1.45% of gross pay goes toward the Medicare tax. Employers pay the remaining 7.65%, for a total of 15.3% (Social Security Administration, 2017) . When hired, employees must complete certain tax forms that form the basis of the W-2 form that employers must file to report their wages. Social Security is a federal program that provides an individual with a sense of protection by paying monthly retirement benefits when you are eligible to retire. Medicare provides the same sense of financial security in retirement by paying benefits for certain health care costs. Workers’ compensation is another basic benefit. The Workers' Compensation Act requires employers to provide benefits to their employees if the loss that occurs is a work-related incident. This law makes the employer absolutely responsible. If an employer decides not to pay workers' compensation, it loses the right to rely on all three common law defenses. These three defenses include the doctrine of contributory negligence, the fellow servant doctrine, and the doctrine of assumption of risk (Beam and McFadden, 2012) . Essentially, these three doctrines made it nearly impossible to obtain compensation from an employer before the enactment of the Workers' Compensation Act. Because they exist, employees are more likely to win a workers' compensation case against their employer if the employer chooses not to provide workers' compensation. In most cases, the employer pays the entire cost of workers' compensation benefits. Workers' compensation laws include medical care, death benefits, disability benefits, and rehabilitation services. Workers' compensation medical care generally has no limit on its cost or the length of time a person can receive it if injured; there is also no waiting period for benefits to begin covering these medical costs (Beam & McFadden, 2012). Disability (worker's compensation) The four categories of disability fall undertotal or partial permanent and total or partial temporary categories. Typically, total disability benefits are 66% of an employee's average weekly wage and continue either for life or until the employee can work again (Beam and McFadden, 2012). Partial disabilities are paid as the difference between employees' wages before and after the accident. Depending on the classification of the injury, Medical Improvement Possible (MIP), Medical Improvement Expected (MIE), or Medical Improvement Not Expected (MINE), is what will distinguish how long a person can receive benefits ( Disability Benefits Help, 2018). . Workers' compensation death benefits cover funeral expenses, as well as cash payments to survivors representing a portion of an employee's average weekly wage. Workers who have made sufficient contributions to FICA are eligible for disability benefits. Unemployment Unemployment insurance requires all businesses to pay an unemployment tax for each employee. Unemployment insurance provides benefits to employees for a brief period if they are fired without good cause. There are eligibility requirements such as actively seeking employment, being able to work and completing a waiting period. The Social Security Act of 1935 required that a payroll tax be imposed on covered employers in order to fund unemployment insurance programs. These programs are funded by federal and state unemployment taxes. The federal tax is 6.2% of each worker's first $7,000 of gross earnings per year, but this percentage can be reduced by up to approximately 90% for taxes paid to the state (Department Of Labor, 2017 ). This does not mean that unemployment insurance solves all the problems of the unemployed. It aims to partially guarantee against massive income shortfalls after being released from employment. The Family Medical Leave Act The Family Medical Leave Act (FMLA) entitles employees to twelve weeks of unpaid but job-protected leave for qualifying medical and family reasons. The FMLA applies to employees of private companies with fifty or more employees (Investopedia, 2017). Businesses with fifty or more employees must also offer affordable health care coverage, under the Affordable Care Act. Sometimes employees face situations related to their home life, such as expecting a newborn, children getting into trouble or sustaining an injury, the death of loved ones, and even health issues. personal. These are issues that would pose a threat to an employee under FMLA in terms of job loss. FMLA helps employees balance their work duties and family needs. The fundamentals of starting a business and providing compensation require employers to provide time for employees to vote, serve in the military, and serve jury duty. Obey workers’ compensation laws. Withhold FICA taxes from employees' paychecks as well as their own contributions. Pay state and federal unemployment taxes. Contribute to disability programs in states where disability programs exist. And finally, follow the Family and Medical Leave Act. Cost Comparison Between Public and Private Sectors Employer Costs for Employee Compensation is a statistical survey and examination of what it costs employers to provide wages and benefits to their employees. The Bureau of LaborStatistics (BLS) conducts these surveys of the private sector, state and local governments, and civilian workers. For the September 2017 mandate, the BLS compiled statistics for nearly 30,000 employees across 6,700 private sector companies; and 8,100 employees from 1,400 different state and local government organizations (U.S. Department of Labor [DOL], 2018). Private Sector Cost Breakdown It costs private sector employers an average of $33.55 for each hour an employee works (DOL, 2018). 69.6% of the $33.55 ($23.3508) is paid as salary, and the remaining 30.4% ($10.1992) is paid as benefits (DOL, 2018). These benefits include: paid vacation ($2.32/hour), insurance ($2.68/hour), retirement ($1.39/hour), additional pay ($1.19/hour) and legally required benefits ($2.62/hour) (DOL, 2018). Cost Breakdown for Local GovernmentsWhen it comes to state and local governments, employers spent an average of $48.78 per employee labor hour (DOL, 2018). The breakdown between salary and benefits percentages of the $48.78 is 62.6% salary and 37.4% benefits (DOL, 2018). Once the $30.54 is paid in wages, the remaining $18.24 is paid in benefits (DOL, 2018). Retirement costs $5.56/hour, insurance costs $5.80/hour, paid time off costs $3.68/hour, and legally required benefits cost $2.71/hour (DOL, 2018). industry. Why then? Government defined benefit pension plans accounted for 10.6% of total compensation, compared to 1.9% for private sector defined benefit pension annuities (DOL, 2018). Government employees also receive higher percentages of paid leave and insurance benefits (DOL, 2018). Defined benefit pension plans are almost non-existent in the private sector, which widens the pay gap between the two employees. Working in the public sector provides employees with stability since the government never goes bankrupt; This is a hard-to-measure benefit that adds even more value to public sector compensation. A working paper by Glaeser and Ponzetto (2013) that demonstrates how public sector pay is influenced by politicians competing to win the public sector vote (Glaeser & Ponzetto, 2013). Public sector workers are better informed about their personal compensation plans; this gives them an informational advantage over other voters (Glaeser & Ponzetto, 2013). Public sector salaries are publicly available, but benefits are not easy to find and are much more difficult to interpret. This political system and process leads politicians to offer generous benefits to public sector workers, as opposed to salary increases (Glaeser and Ponzetto, 2013). If a politician decided to cut public sector benefits, he would lose votes from public sector voters and would not gain many votes from other non-public sector voters due to his information disadvantage (not not knowing that lower benefits mean less profits). taxes) (Glaeser & Ponzetto, 2013). Even if the politician tried to increase public sector wages to regain votes, he would lose more votes among the non-public sector population, because the non-public sector population is better informed about wages than about benefits. (Glaeser and Ponzetto, 2013). Generally speaking, it is essential to understand that politics has a major influence on the economy. The budgets ofStates are facing severe pressures from rising pensions and health benefits. If all voters were better informed about the policies behind public sector pay, it is likely that more people would push for logical change. paid 17% more than comparable employees in the private sector. The federal workforce consists of 2.1 million civilian workers and represents a $276 billion tax burden on U.S. taxpayers (Edwards, 2017) . In 2016, federal employees earned 80% more than private sector employees and 42% more than local government employees (Edwards, 2017). It's safe to say that federal employees have each other when it comes to securing a stable, well-paying job. In an effort to save money, federal wages were partially frozen between 2011 and 2013, saving billions. However, there is still a greater need for savings (Edwards, 2017). Our government needs to focus more on reducing excessive benefits (especially its defined benefit plans) for federal employees, as well as ending low-value programs. Bureau of Economic Analysis Statistics 2016 data from the Bureau of Economic Analysis (BEA) shows that federal civilian workers earned an average of $88,809 on wages alone, while private sector employees earned an average of $59,458. When you factor in benefits and health care, the gap widens. Average total compensation for federal workers increased to $127,259 and average total compensation for private sector workers increased only to $70,764 (Congressional Budget Office [CBO], 2017) . The mathematics speaks for itself. A significant gap of $38,450 in additional benefits for federal workers compared to the $11,306 in additional benefits for private sector workers. Compensation growth is driven by the movement of federal workers into higher pay brackets despite actual performance (CBO, 2017). Due to the operation of the General Schedule (GS) pay scale, federal employees receive some problematic pay increases (CBO, 2017). The first is the annual wage adjustment based on average wage growth, essentially a cost-of-living adjustment (CBO, 2017). The second pay increase is due to federal employees moving up the ten steps in their GS level based on seniority (CBO, 2017). Deserving longevity over performance is problematic in itself. Federal unions actively fight legislators who attempt to implement a reduction in worker wages (Edwards, 2017). Additionally, members of Congress who have a plethora of federal workers in their districts frequently oversee pay raise efforts (Edwards,2017). Federal employees receive health insurance, retirement health benefits, and pension plans with inflation protection, as well as a retirement savings plan that also benefits from a government match (Edwards, 2017). The most important advantage of all is their job security. They are supported by civil service protections and nearly a third of federal employees are represented by unions (Edwards, 2017). This means that federal employees are rarely laid off. It has been found that only 0.5% of federal workers are laid off each year for any reason (Edwards, 2017). Possible reformsFederal workers deserve to be paid appropriately, and the federal workforce needs talented employees. paid industries. Reducing federal wages would encourage layoffs of immobile employees, creating room for younger, more creative minds while reducing costs (Edwards, 2017). Removing overly generous employee benefits, such as defined benefit pension plans, would reduce costs. Privatization is considered a dirty word in local politics, but it can often be successful. Privatizing federal jobs is another possible way to reform federal wages. Additionally, to address budget shortfalls, policymakers should consider reforming federal compensation to narrow the gap between federal and private worker pay. Alphabet: Unprecedented Compensation and Facilities In 2015, Google became a technology conglomerate creating a parent company named Alphabet Inc. Fortune magazine has listed them eleven times on their annual list of the 100 Best Places to Work, and in 2017, they were number one (Fortune, 2017). Google offers the most competitive benefits packages, gives its employees plenty of opportunities for internal growth, and ultimately satisfies them by being part of something that will positively impact the world. Google's Accessible BenefitsGoogle offers an exhausting list of benefits that cost them next to nothing. Some of their on-site perks include oil changes, dry cleaning, massage chairs, nap pods, haircuts, bike repair, ATMs, organic grocery delivery and equality of social benefits; all of which represent negligible costs for Google (D'Onfro, 2015). The rewards offered by such perks are improved morale and efficiency. Their massages, free food, shuttle service, and subsidized childcare, however, affect the company's bottom line (D'Onfro, 2015). They have offices in North America, Latin America, Europe, Asia Pacific, Middle East and Africa. Google has a knack for expanding its offices, or “campuses,” as many of them are called. Campus is a more appropriate word for their offices located in New York, New York, and Mountain View, California. Their New York office takes up an entire city block, or 2.9 million square feet. It is therefore natural that they provide their employees with scooters to move around the huge building. The Mountain View campus they call “Googleplex” is 2 million square feet (Hartmans, 2017). Filled with colorful bicycles and electric cars that employees use to travel from building to building, a GARField (Google Athletic Recreational Field), and even organic gardens in which the produce is used by their bosses. In many of their other offices, they have putting greens, slides between floors, Lego rooms, fire poles, and bowling alleys. The sheer aesthetic appeal of working at Google is an incalculable benefit that adds value to their already enormous list of perks. Combating Poor HealthPoor health and obesity cost businesses $225 billion annually (Centers for Disease Control and Prevention [CDC], 2016). Google combats this problem by offering healthy meals all day long at no cost to its employees. An interview was conducted with Nate Keller, the former executive chef of Google before his departure in 2008. He stated that in 2008, with 19,000 employees, 675 kitchen staff and serving 40,000 meals perToday, Google spent nearly $80 million per year on food (Shontell, 2014). Google doesn't release this information publicly, so costs are likely higher today. To give some context, Alphabet Inc. had approximately $109 billion in revenue for fiscal year 2017 (ABC.XYZ, 2017). Spending even $100 million on food would only cost them 0.1% of their income. In return, this small investment helps keep Google employees healthy and productive. By offering free food, it helps reduce employee food costs by ten. Employees can also drink beer or wine in the office on Fridays, which is a real enticement.SalaryAs for salaries, they are not publicly available, but there are websites such as Glassdoor where salaries are listed. Employees have published their average salary while working at Google. . Glassdoor is a self-reported data collection website where people can post information about their employment. The information cannot be fully accredited, even though the majority of posts on Glassdoor were made by genuine Google representatives, it is still possible that the information is invalid. For the sake of research, this is the only source I was able to obtain for some aspects of Google's benefits. Glassdoor data compiled from 4,440 respondents indicates that the average salary for software engineers is $118,958, with a range of $78,000 to $215,000 (Glassdoor, 2018). According to the BLS, the average salary for workers in all occupations in the United States in 2016 was $49,630 (DOL, 2016). Being about $28,000 above the average salary is a good idea for Google. This is simply a comparison between an average American worker and a software engineer at Google. So, an extra $30,000 for a software engineer doesn't seem like the biggest pay raise. Keep in mind that this is just a salary. When you factor in Google employee benefits, that number will likely increase by another $30,000 or more. Healthcare Although Google offers seemingly endless built-in benefits, let's take a look at their employee benefits. social benefits. They offer on-site doctors, medical services, and offer excellent health care options. They provide employees with travel insurance for personal and business vacations, making employees feel safe on the road (Glassdoor, 2018). Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs) are options you can choose from for certain health coverages you may choose to enroll in. This applies to most employers offering any type of health plan. HMOs lock you into one primary care doctor and you can't change without a referral. PPOs offer flexibility in that you can see any primary care doctor you want. If you are in your network, the co-pay and out-of-pocket costs are consistent, but they will increase if you leave your network. RetirementFor retirement purposes, they offer a 50% match of $401,000 up to $8,250 with auto-enrollment (Glassdoor 2018). In other words, to get the full contribution, you'll need to contribute $16,500 to your 401,000. The 401k replaced the pension. Being able to contribute a portion of your salary tax-free (assuming it's traditional) to a range of stocks, bonds and money markets is aanchor point in itself. 401k retirement plans are a great alternative retirement account. Although vesting periods vary; This creates a sense of loyalty if your company has a large contribution plan. Death Benefits Google's death benefits are generous. Surviving spouses of deceased Google employees receive 50% of their salary for the next 10 years. The shares of a deceased employee also vest immediately; their children receive $1,000 per month until age 19, but if they study full-time, these payments continue until age 23 (Casserly, 2012). Unlike most benefits offered by Google, these more than generous death benefits are arguably costly for the company. Instead of these death benefits increasing the efficiency of the company, they establish the company's standard of care for each of its employees. When a company is this friendly, reasonable and understanding, it's hard not to appreciate their morals. Paid Leave New mothers receive 18 weeks of paid maternity leave and an additional four weeks if they experience complications during childbirth. Once again, another nice and reasonable plan. They even give fathers or any type of primary caregiver up to 12 weeks of paid leave. In addition to paid maternity leave, employees also receive an additional $500 to spend on the newborn (Adamczyk, 2015) . First-year engineers receive 15 days of paid leave, increasing to 20 days after 3 years and 25 days after 5 years. Employees can also take three months of unpaid leave (Adamczyk, 2015). These kinds of benefits definitely attract the attention of top engineers. Goal of Great Compensation Why do companies like Google spend so much money on their benefits? Any competitive business measures the cost of benefits against increased efficiency and productivity. The goal is to attract, place and retain the right people for the right job. Assuming that your satisfied employees lead to more satisfied customers, there will be an increase in profitability and market share within your industry sector. Google equates success with employee satisfaction (Google, 2018). Simple people management practices that they implement; for example, reduced status differences and first-order advantages lead to a surge in innovation and reduced costs. Can't afford Google-sized perks? No problemMassive holding companies like Alphabet Inc. offer unprecedented compensation packages, unless you work for a comparable company like Facebook or Adobe. As for your average company, you can't offer free food, billion-dollar offices, and generous 401k plans. To be competitive, you need to look at how much people actually value employee benefits. The weight of value for health care, dental care and vision. An increase in benefits over a salary increase is favored by 80% of workers who participated in the Glassdoor Employee Confidence Survey ( Glassdoor, 2015) . What options are available to companies that simply can't afford to offer such lavish benefits? A study conducted by Fractl (2016) highlights the fact that some of the most sought-after employee benefits are the least expensive. The principle of this study was to ask 2,000 people what advantages they would grant "a certainconsideration” or “a lot of attention” when they had to choose between a high-paying job with lower benefits or a low-paying job with higher benefits (Fractl, 2016). . Health, dental and vision insurance rank first among the most important benefits. 88% of participants said they would either consider having better health, dental and vision coverage, when choosing the lowest paying job (Fractl, 2016). Health insurance is the most expensive cost for employers. are able to provide health, dental and life insurance, with the understanding that health cover providers will charge small businesses more than large businesses. Quite simply because of the lack of purchasing power. According to the National Conference of State Legislatures (NCSL), small businesses pay on average 8 to 18 percent more for comparable coverages than large businesses (National Conference of State Legislatures [NCSL], 2017). Health insurance is the most expensive health insurance that employers offer their employees. According to the Kaiser Family Foundation (2016), this costs an employer $6,435 per individual coverage and $18,142 for family coverage (Kaiser Family Foundation, 2016) . Additionally, depending on the employer's prior health claims and the specific industry in which it operates, the premiums charged to employers will vary. Since better health, dental, and vision coverage is more attractive to employees, small businesses will need to spend additional money to attract and incentivize employees. The Weight of Other Benefits Small business employers will be jovial to know that flexible schedules, vacation time, mobile work options, and unlimited vacation time are the other most popular benefits among employees (Fractl, 2016). With constant advancements in the world of technology, “going to work” has a whole new dimension. meaning. The world of technology is full of communication devices that allow people to stay virtually connected. From FaceTime to Skype to screen sharing, employees can work from home more than ever (Collins, 2016) . Essentially, depending on your business, this could reduce overhead costs by up to 100%. Which would allow any employer to spend more money on popular health, dental and vision plans. A More Mobile Workforce The amount of money companies are throwing away due to the reluctance of people to take time off runs into the hundreds of billions (White , 2016) . It is estimated that businesses waste $272 billion because people refuse to take time off (White, 2016). An unlimited vacation policy would not only eliminate these unnecessary costs, but develop a more preferable company culture. Employees who are treated as trustworthy people will likely become more productive and loyal. Work-life balance is increasingly important to the workforce. Studies have shown that a majority of people would consider a lower-paying job with more flexibility, even without the “best” benefits package (Fractl, 2015). Ultimately, employers have strategies to be able to compete with larger companies that can afford to offer better benefits. Offering the right combination of low-cost and most desirable benefits can provide small businesses with the competitive edge they need to attract top talent.Job SearchSearching for a job comes with the.

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